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Facing growing calls from local government and even from within the National Party for Government leadership on the issue of single-use plastic bags, new Associate Environment Minister Scott Simpson looks likely to opt for a levy rather than a ban - and that could be good news for local charities.

Simpson has set up a working group looking at ways to reduce plastic bag consumption, and he is about to receive an open letter signed by (at last count) nearly half the country's mayors asking central government to either impose a national levy on single-use plastic bags, or give local authorities the right to do so themselves.

Dunedin Mayor Dave Cull said councils were “currently looking at what we can do locally to reduce the number of these bags going to our landfill, but the truth is they need to be stopped at the source. Local government is only empowered to do so much, and we need central government to step up as well.”

The mayors hope that money raised by a levy would be returned to councils to be spent on waste minimisation and local environmental measures.

But Simpson told a break-out meeting of delegates at this weekend's National Party conference that he likes the UK model where retailers charge shoppers a small fee for plastic bags and keep the money themselves to distribute to charities of their choice.

A levy, not a ban

Asked by a delegate why, if Bangladesh was able to ban single-use plastic bags 15 years ago, New Zealand couldn't do the same (to calls of "hear, hear" from the others in the audience), Simpson said he didn't think an outright ban would work.

"I think that New Zealanders are ready for a conversation about this stuff and I would like to, if it is at all possible, see if we could work with the sector, work with local government to see where we could get with it - but to be blunt I am a bit ..., I just know, if we did the big 'you must do this', that there would be a degree of push back," he said.

"It doesn't go to the council, it doesn't sort of disappear into the big consolidated fund."

"I would prefer if we could to get to a point where we had some sort of product stewardship, voluntary scheme."

"There are a variety of models around the world but I quite like … the model they use in the UK which is you are charged a levy. It is 5p a bag, so it's not a ban but if you want a plastic bag at the supermarket you pay for it – 5p.

"Now, the trick that they do - which again seems to be working quite well for them - is that that 5p doesn't go to the Government, it doesn't go to the council, it doesn't sort of disappear into the big consolidated fund.

"The retailer keeps that 5p and then the retailer then distributes that money to charitable causes of their choice. And there is a self-auditing process, and certainly it was my experience when visiting the UK that actually the model seemed, on the face of it, to be working quite well."

Simpson's response is unlikely to please the councils, and it certainly didn't quieten the delegates, with one receiving loud applause after standing up to tell the minister to just "get to grips with it and not be afraid [of pushback], because the other side will take it – we've got a lot of folks that are looking for the green things in our policies, [things] in our homes that we can do, and we need some leadership."

How it works in the UK

The UK levy that Simpson prefers was introduced in October 2015 and requires all retailers employing at least 250 staff to charge 5p for single-use bags.

The retailers are required to pass the revenue raised to charities and non-profit organisations, aside from reasonable expenses.

In the first six months of the scheme, it raised £23 million ($40.26m) for charities. Notably, it financed the completion of a Dementia Research Centre at UCL in London, which was facing a £100m shortfall until retailers, including Asda and Waitrose, pledged their bag revenue.

Marks and Spencers splits its donations between cancer charities and the Marine Conservation Society. Aldi gives all its bag profits to the nature conservation charity RSPB, Lidl splits its between Keep Britain Tidy and a children's cancer charity while Sainsbury's gives its bag profits to various "good causes chosen by staff and customers" (often local charities and schemes). Tesco has a local community grant scheme known as "Bags of Help".

The major UK retailers reported plastic bag consumption by store customers dropped by around 80 percent in the first six months after the introduction of charging.